Companies agree to pay $130 million settlement in Passaic River pollution case

Posted Jun 11, 2013

The state Attorney General and Department of Environmental Protection today announced companies will pay the state $130 million to settle a lawsuit concerning pollution in the Passaic River, seen here in this photo taken in Passaic County.

TRENTON — New Jersey officials announced Tuesday they had reached a $130 million settlement with several foreign-based companies responsible for pollution in the lower Passaic River, clearing the way for the state to press its case against the main target in a long-running civil lawsuit.

The state Attorney General’s Office and the Department of Environmental Protection said the agreement, which was presented to a Superior Court judge on Friday, would allow them to focus its case on Occidental Chemical Corp., which inherited responsibility for much of the pollution.

The lower 17-mile stretch of the Passaic River, a federal Superfund site, is considered among the most contaminated waterways in the world and once topped the Environmental Protection Agency’s National Priority List.

"The state is going to get a large sum of money to help begin to payback its cost in this litigation and for the future to help with the cleanup of this river," Larry Ragonese, a spokesman for the state environmental agency, said. "Responsible parties are having to pay money to help take care of contamination that occurred due to their negligence, so it’s great news."

Ragonese said the companies could end up paying an additional $400 million over time, "as we determine the situation with the river."

The state did not provide specific details about the settlement because the matter is still before the courts.

It remains unclear how much of the $130 million will go toward cleaning up the river, which snakes through cities and suburbs in North Jersey and is contaminated with a number of toxic chemicals, including dioxin and PCB’s.

Gov. Chris Christie’s proposed $32.9 billion budget for the fiscal year beginning July 1 includes plans to use tens of millions of dollars from a separate settlement in the case as general state revenue, and this next infusion of cash could be spent in the same way.

"That’s not been decided at this point," Ragonese said.

A spokesman for the governor did not respond to a request for comment.

Debbie Mans, the executive director of the NY/NJ Baykeeper, welcomed the settlement, but cautioned the Christie administration to use the money on the river.

"It’s critical the money go back into the Passaic River and the communities along it, and not be just swept into the general fund for the state as a one-off," Mans said. "That would be just really a slap in the face to those Passaic River communities."

The settlement was presented on Friday to state Superior Court Judge Sebastian Lombardi and Special Master Marina Corodemus, both of whom have been overseeing the case involving hundreds of defendants.

THIRD-PARTY SETTLEMENT

The parties that reached the latest agreement include Repsol, S.A., an oil and gas conglomerate based in Spain; YPF, S.A., an energy corporation based in Argentina and several subsidiaries; CLH Holdings Inc.; Maxus Energy Corporation; and Tierra Solutions.

Michael Turner, a spokesman for Maxus and Tierra, declined to comment today.

Earlier this year, the state reached a preliminary settlement with more than 250 third-party defendants, including more than 70 municipalities and public authorities, that were drawn into the case by Tierra and Maxus. The two companies contended that others had contributed to contamination in the river — many through the release of raw sewage — and should share in the damages. The third-party settlement is worth an estimated $35 million.

Some of the highest levels of contamination are found near Newark, where the river is choked by dioxin, a chemical suspected of causing cancer and a byproduct of Agent Orange, which the now-defunct Diamond Shamrock Chemicals company produced for the military during the Vietnam War.

Occidental, through a series of corporate transactions, is considered responsible for the pollution.

In a statement Tuesday, Occidental said it had only recently received a copy of the settlement and that it was still being reviewed. But it hinted that company executives might not be satisfied with the terms and said it expected that Maxus would try to obtain Occidental’s "release from all liabilities related to this site, which does not appear to have occurred."

FINALIZING PLANS

In 2005, the state sued Occidental and the companies that are now settling. The third-party defendants were brought into the case several years later, bringing the litigation to a near standstill. The settlements, if finalized, should leave just Occidental remaining.

"We’re happy about it," Mans said. "I think, obviously, the next step is to make sure Occidental pays their fair share. I think that’s going to be where a lot more money comes in."

Cleaning the river is a separate matter from the state’s lawsuit. The federal Environmental Protection Agency is finalizing its plans, and work on one contamination "hot spot" is to be started this year. All of the work could cost billions of dollars, agency officials have said.

Jeffrey Tittel, director of the Sierra Club in New Jersey, said he was concerned that ending the state’s case against Tierra, Maxus and the other defendants might make it harder for the federal government to make those companies pay.